Patients who present with acute lung injury (ALI) and shock have a high mortality (30-40%). Therefore, innovative therapies are needed to improve clinical outcomes in these patients. Our research group and other investigators have reported that bone marrow-derived mesenchymal stem cells (MSC) reduce pulmonary and non-pulmonary organ injury and mortality in preclinical models of ALI and sepsis. Our research group has also found that intravenous MSC are effective for reversing ALI in an ex vivo perfused human lung preparation. The beneficial effects of MSC are explained primarily by the paracrine release of anti-inflammatory cytokines, growth factors, angiopoietin-1 and other molecules that restore normal function of the endothelial and endothelial barriers in the injured lung and also enhance repair. MSC also produce anti-microbial products that inhibit bacteria growth. Allogeneic human MSC have been administered to over 2,000 patients with a variety of clinical disorders without major adverse events. Therefore, we are proposing a phase II clinical trial that will enroll 60 adult patients with ALI and shock in a multi-center, placebo- controlled, 2:1 randomized trial of MSC (40 patients) versus placebo (20 patients). Patients will have ALI secondary to all clinical causes except major trauma. The patients will be recruited at five university medical centers (UCSF, Stanford, Pittsburgh, Vermont, and Harvard). The MSC-treated patients will receive clinical- grade MSC produced at the University of Minnesota Program in Applied Therapeutics, supported by the NHLBI. The trial will test the following three hypotheses. Hypothesis 1: Compared to placebo treatment, human MSC will reduce the severity of ALI as quantified by the 4-point composite ALI score. Hypothesis 2: Compared to placebo treatment, human MSC treatment will reduce non-pulmonary organ failures as measured by the Brussels Organ Score. Hypothesis 3: Compared to placebo treatment, human MSC will have an acceptable safety profile in patients with ALI. We are also proposing two ancillary studies, both of which will use samples of plasma and bronchoalveolar lavage fluid (BALF) from patients in the clinical trial to provide mechanistic insights into how human MSC reduce lung injury and non-pulmonary organ failure. RELEVANCE (See instructions): Acute lung Injury is a major cause of acute respiratory failure that affects 200,000 patients in the United States alone. This clinical trial will test the potential therapeutic value of cell-based therapy with bone marrow derived mesenchymal stem cells from normal adults (age 18-30) as a novel therapy to reduce mortality in critically ill patients with acute lung injury and acute respiratory failure.